Health Insurance Benefits Unknown To Many
In India, healthcare expenses are mostly out of pocket. Health insurance companies have, in the last few decades, made efforts to make plans appealing and more beneficial to customers.
India faces serious healthcare issues – low public spending on healthcare, rising medical inflation, increasing healthcare costs in the private health industry, and high risks of vector-borne, lifestyle, and contagious diseases.
The most important benefit of health insurance is, of course, coverage towards medical treatment expenses. But health insurance benefits are more than meets the eye. It has many lesser-known benefits, too.
There are the benefits of health insurance – some commonly known and some unknown to many.
Benefits of health insurance
Health insurance is designed to provide financial coverage at the time of medical and healthcare treatment needs. The extent of coverage provided by health insurance plans varies from plan-to-plan. While some plans are designed to provide comprehensive coverage, others cover only specific diseases. With health insurance, the insured does not have to worry about medical treatment expenses and can avail of quality treatment.
Health insurance policyholders are eligible for tax deduction benefits under Section 80D of the Income Tax Act. The tax deductions are based on different age groups, and type of plan, among other factors. Tax benefits range from up to Rs 25,000 to up to Rs 1 lakh, depending on
Also known as hospital daily cash allowance, this facility provides a fixed amount of cash to the insured during the time of hospitalization. The number of days to be spent in the hospital to avail of this facility may vary for each insurance company or insurance plan. This allowance can be beneficial in case of medical emergencies and hospitalization as one does not have to worry about the daily hospital expenses up to a certain amount.
Cashless claim option
With the cashless claim option, the insured can receive medical treatment without having to pay for the expenses to the hospital. In cashless claim, the health insurance company directly makes the payment to the hospital. However, this facility is available when the insured chooses one of the hospitals from the insurer’s hospital network.
There are numerous advantages of cashless claim facility: it keeps financial worries away as one can avail of quality medical care without having to shell out money; it also ensures quality treatment in the best hospitals.
Did you know health insurance policies provide coverage for treatments taken at home? Also called domiciliary hospitalization, domiciliary treatments are those where the insured is treated at home and not in a hospital. It may also include expenses related to treatments taken at home. All health insurance plans do not offer this coverage.
Usually, only allopathic treatments are considered; and not alternative treatments. It requires the insured to provide proof for the reason for not being able to get hospitalized. A key point to be noted for domiciliary treatment is that most insurers put a limit to the coverage amount. The whole sum insured cannot be utilized for domiciliary treatment.
Many health insurance companies offer coverage for traditional treatments such as Ayurveda, Yoga, plaUnani, Siddha, and Homeopathy (AYUSH). With a rising number of people choosing alternative treatments to allopathy, a number of insurers have included AYUSH as part of health insurance plans.
Pre and post hospitalization coverage
Most comprehensive health insurance policies provide pre-hospitalization coverage of 30 days or more and post-hospitalization of 60 days or more. These are medical costs incurred by the policyholder before and after hospitalization. These may include ambulance rent, diagnostic tests and more.
Free health check-up
Most health insurance companies offer free health check-ups after the completion of a certain number of years. Many policyholders are not aware of this or forget about this benefit after purchasing a policy. It is a benefit that one must make use of as full-body health check-ups can cost anywhere between Rs 4000 to Rs 10,000 depending on the hospital and the kind of check-up.
When a policyholder does not make any claims in a year, the insurance company offers a no-claim bonus, which gets added to the sum insured. The amount varies from insurer to insurer. Some insurance companies also offer cumulative no-claim bonus.
When health insurance proof is mandatory
Health insurance is mandatory for certain things such as travel, studying abroad etc. Having a health insurance plan makes it easy to meet the paperwork and document requirements. The best part, buying a health insurance plan takes just a few minutes and policy activation can happen within hours. Hence, if a person needs health insurance as a proof, it can be done easily and in no time.
It plays a crucial role in personal financial planning
Many people treat health insurance as a separate tool and do not consider it a part of their financial planning. However, health insurance can be an essential instrument in every personal financial plan. It can provide financial security during a medical emergency. Just like a savings account, health insurance can act as a financial back-up for healthcare requirements.
Health insurance policies also include convalescence benefits – recuperating or recovery benefits. This benefit is designed to cover supplementary costs such as loss of income due to prolonged hospitalization. The insurer, at times, provides a lump sum amount as part of this coverage. The details such as amount and period of convalescence benefit are pre defined in policies.
Organ donor expenses
Surgeries could mean huge expenses. Many policyholders are not aware that health insurance policies also cover organ donor expenses – not just the policyholder’s surgery expenses, but even the donor’s surgery and treatment expenses.
OPD Cover is Out Patient Department Cover, which means coverage for expenses such as doctor’s consultation fees, pharmacy bills, dental treatments, and health check-ups, and diagnostics tests. Insurance plans that offer coverage for OPD expenses compensate for the above-mentioned expenses. These expenses are generally not covered by regular health insurance plans. Even though these expenses may seem small compared to hospitalization, over time, they can add up to huge amounts.
Health insurance brings peace of mind
A key benefit of having health insurance is that it brings peace of mind and relieves one of financial worries during medical emergencies. A lot of people may disregard this benefit, unless and until they face a medical emergency that leaves a hole in their pocket and eats up their savings. With rising medical expenses, hospitalisation that costs on an average between Rs 50,000 and Rs 1 lakh today, might cost four or five times more in the next five to 10 years. Wouldn’t it be wise to invest in health insurance instead of depending on savings?
To sum it up
Now that you know of the numerous benefits of health insurance, make sure you do not miss out on any of these and other lesser known benefits. The benefits of health insurance are many, and can be effectively utilised in personal and family financial planning. From lowering tax bills to enhancing peace of mind to ensuring sufficient coverage to safeguard from the adverse and uncertain consequences of health – health insurance, when done right, has always proven to provide benefits.
FAQs: Health Insurance Benefits
What are the benefits of having health insurance?
Apart from the obvious - coverage against healthcare expenses - health insurance provides many benefits.
It makes access to quality healthcare easy
Some plans provide cashless claims, which means policyholders do not have to worry about out-of-pocket expenses
Health insurance plans provide tax benefits on the premium amount
Every claim-free year adds a no-claim bonus to the sum insured
It brings peace of mind and financial security
What kind of tax benefits does health insurance offer?
Health insurance policyholders can avail of tax benefits under Section 80D. The benefits depend on various factors such as age. E.g. if individuals and family members are under the age of 60 years, tax deductions of up to Rs 25,000 can be availed. If the eldest family member is under 60 years and parents are above 60 years, tax benefits of up to Rs 75000 can be availed. If self and parents are above 60 years, up to Rs 1 lakh of tax benefit can be availed.